Due to precautions related to COVID-19, we have expanded our options for remote consultations. Please contact our office to discuss whether a full phone consultation or video conference is appropriate for your situation.

Is it possible to minimize the risk of customer nonpayment?

On Behalf of | Aug 2, 2022 | Business Litigation

Most business owners want to avoid litigation and legal proceedings whenever possible. Litigation is often disruptive in companies of all sizes –even large successful businesses.

Simultaneously, you want your customers and clients to pay for the goods or services you provided in good faith. Like many, you may wonder how mid- to large-sized businesses can minimize the risk of customer nonpayment.

You can take several approaches to remove at least some risk that your clients will default on money owed to your company.

Use airtight contracts

Whether you or the other party provides the contract, make sure it contains provisions that protect your business against nonpayment. Your contracts should outline the obligations of each party and provide detailed instructions to address any disputes and breaches that may arise.

Make it easy to pay

There are a host of valuable online tools business owners can use to make customer experiences more convenient, especially in business to business (B2B) transactions. When your clients can conveniently pay their bills online, you have better odds of receiving your payments promptly.

Incentivize early payments

Many large businesses offer financial incentives like discounts or special prices to encourage clients and customers to pay their invoices early. You can work with your accounting department to arrive at reasonable incentives that do not harm your bottom line.

These tips may help you avoid non-paying customers in the future, but what about right now? If the unpaid invoices plaguing your accounting department have grown to an unmanageable volume, consider learning more about collecting business debts. Knowledge of effective collection strategies will contribute to the legal and financial health of Florida businesses.